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Old 01.02.2015, 12:36
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Employment lawyer success fees

Dear all,

Would anyone know if it is customary in Switzerland to offer a lawyer success fees? If so, how much or what percentage of the amount recovered would be customary?

Thanks in advance!
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Old 01.02.2015, 13:35
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Re: Employment lawyer success fees

Don't lawyers set their own rates, and not just go with "offers" from clients?
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Old 01.02.2015, 13:46
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Re: Employment lawyer success fees

Let me clarify, of course I am paying the lawyer the agreed hourly rates!
I just would like to offer in addition a success fee, but before mentioning it to the lawyer I would like to know:
1) Is it legal in Switzerland to offer a success fee?
2) If it is legal, what percentage would be customary?
Thanks
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Old 01.02.2015, 14:24
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Re: Employment lawyer success fees

I am in the middle of an employment law case and have tried several times to negotiate either a fixed rate for the whole case or a success fee with my lawyers but they have basically refused. They have slightly reduced their hourly rates (maybe to get me to stop asking). So, I would say there is no harm in asking but don't get your hopes up!
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Old 01.02.2015, 14:32
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Re: Employment lawyer success fees

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1) Is it legal in Switzerland to offer a success fee?
2) If it is legal, what percentage would be customary?
1) Under the national law regulating the legal profession it is perfectly legal in Switzerland to offer a success fee in addition to the 'normal' fee. However, cantonal laws apply as well.

2) I am an inhouse lawyer who regularly instructs outside counsel. I have not yet agreed on a success fee with any Swiss counsel ever. I expect them to deliver the same level of professional services with or without such success fee. Should any lawyer ever insist on this I'd look elsewhere for external legal support.
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Old 02.02.2015, 21:36
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Re: Employment lawyer success fees

As xkcd stated a so-called uplift (pactum de palmario) which is paid upon success in addition to (normal) rates is permissible.

I put normal rates in brackets since the rates can be reduced, they simple need to be high enough to cover the lawyer's costs and a bit (more info in German: http://www.oliverkunz.ch/blog/?itemid=20). At the time of the court decision rates of CHF 200 were considered sufficient. I gather that this has increased somewhat since then.

The reasoning is that this will give the lawyer sufficient flexibility to give unbiased advice and not needlessly pursue a (hopeless) case (possibly contrary to the client's interest) simply in order to achieve a win and thus earn money. Accordingly, a pure no-win, no-fee arrangement is not admissible. So a lawyer will not be allowed to take a case on a pure contingency basis ( Pactum de quota litis). If he does he will get into trouble with supervisory authority.

Invariably it is the client that proposes a success fee arrangements. Either as a quid pro quo for reducing the hourly rates, capping fees, etc., or because the client believes this will align the interests of the client and the lawyers. There are quite a few different options:
- a fixed uplift sum
- a percentage of the recovered amount
- reduced rates that will subsequently be increased if you win.

I've seen it applied a few times but (i) you need to be a sophisticated client in that you really need to map out all the eventualities, i.e. what happens when a matter gets settled, how are counterclaims considered, etc. (don't expect the lawyer to help you here, you are in a negotiation), and (ii) generally it only makes sense in large scale disputes with significant fees being generated.

In smaller cases, the client is generally better off simply asking for a discount.
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Old 02.02.2015, 21:46
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Re: Employment lawyer success fees

Thank you very much for the detailed information and the advice, I really appreciate it!!
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